Land Rights in Indonesia
Right of Ownership
The right of ownership is a right that provides a landowner with complete rights over owned land in Indonesia. There is an expiration date imposed on the ownership of the land. Only Indonesian citizens and businesses are entitled to the right of ownership. However, these businesses do not include locally-owned companies (PTs) or foreign-owned companies (PMAs). If it happens that the holder of the right of ownership is a foreigner who owns a PMA, the foreigner must convert the right of ownership into other rights.
Right to Build
The right to build is the most common land right which is often owned by PMAs which are based in Indonesia. The right to build is a right related to state land. It allows its holder to use the land to construct specific buildings. The right to build is granted for anywhere up to 30 years; it can also be renewed for up to 20 years. The right to build may be held by either individuals or business entities. This right can be transferred to other eligible third parties for as long as it is active.
Right to Cultivate
The right to cultivate is a right related to state land which allows its holder to use the land in question for agricultural purposes. The right to cultivate has a validity of anywhere between 25 and 35 years. Renewals may extend the validity period by up to 25 years. Either individuals or business entities based in Indonesia may hold the right to cultivate. This right is transferable to eligible third parties while it is valid; however, such a transfer is to be registered with any relevant land office in Indonesia.
Right of Management
The right of management is a right given by the government. It allows its holder to control land. This right is only granted to national and regional government agencies, state-owned companies, regional government-owned companies, limited liability state-owned companies, special-authority agencies, and certain government-affiliated legal entities.
State-owned companies may use their right of management to sell related land to PMA companies. When such companies choose to do so, the state-owned company and the PMA company which are involved will become part of a cooperation agreement. As part of such an agreement, the PMA company will gain the right to use the land in question as well as the right to apply for the right to construct buildings on that land. Building rights related to such land may also be mortgaged to a third party.
Right to Use
The right to use is a right to utilize land for any purpose as well as to collect products gained from the ownership of such land. It is available to Indonesian citizens, Indonesian business entities, foreigners who are living in Indonesia, foreign business entities currently operating in Indonesia, representatives of foreign countries or international institutions, national and regional government institutions and agencies, and social and religious institutions. The duration of the right to use is limited. Under certain circumstances, this right is also transferable.